AC311 Chapter 20

changes in account principle

Change from one generally accepted accounting principle to another

prior period adjustment

an addition or reductio in the beginning balance of retained earnings due to an error corrections

changes in accounting estimate

includes revision of an amount due to new information or new experience

estimate

new information that becomes available about an event or transaction frequently results in a change in _____

change in reporting entity

requires financial statements of prior periods to be revised retrospectively

prospective approach

requires that no change is made to previous years' financial statements

accounting error

restatement of financial statements

accounting changes

this includes changing in accounting principle, accounting estimate, and reporting entity

retrospective

when financial statements are revised to reflect the impact of a change in accounting principle this approach is used ____

change in estimate

when it is impossible to distinguish between a change in principle and a change in estimate, the change should be treated as a ___

prospective

when it is impracticable to measure the period specific effects of change in accounting principle this approach should be used